A mining headache for Peru’s president

President Ollanta Humala (pictured), who was elected on a platform promising to rein in the mining giants, is facing multiple protests in Peru and is losing allies over his perceived support for controversial mining projects.

When Peruvian President Ollanta Humala came to power a year ago, he promised to bend international mining companies to the will of Peruvians. But as he works to resolve two major mining disputes in his country, the left-leaning nationalist is increasingly at odds with many of his own allies over what they perceive to be his failure to deliver on electoral promises.

However, with the mining industry accounting for 60% of the country’s export earnings, 49-year-old Humala faces a difficult crossroads.

CLASHES BETWEEN POLICE AND ESPINAR PROTESTERS

The president was forced last week to publicly back his own prime minister, Oscar Valdes, who had been urged to resign by some lawmakers of the president’s own Gana Peru party. 63-year-old Valdes, a former military man, was blasted for what many observers called a repressive crackdown on anti-mining protests in the southern Espinar region near the city of Cuzco.

Espinar farmers blame Swiss-Anglo mining giant Xstrata, who own the local Tintaya copper mine, for poisoning their livestock and polluting water supplies. Clashes between police and Espinar residents calling for new practices at the Tintaya mine led to the death of two protesters and saw dozens more injured on both sides on May 28.

Following these deaths, Humala’s government ordered a 30-day state of emergency for the region and moved in to arrest a local left-wing mayor, Oscar Mollohuanca, who was slapped with a five-month jail sentence for inciting protesters to enter the installations of the Tintaya mining camp.

Speaking on Peruvian Canal N television last Friday, environment minister Manuel Pulgar-Vidal said Humala’s government was hoping to restart negotiations with the anti-mine protesters, despite the temporary suspension of civil liberties.

“Our mission is to resume the dialogue, because all the elements that are necessary for dialogue with the local authorities are in place,” the minister said.

However, officials in Espinar do not agree with the government in the capital Lima. They sited the lifting of the emergency decree and the immediate freeing of mayor Mollohuanca as conditions to any further talks.

THE TINTAYA MINE (CLICK TO ENLARGE)

Espinar is not the only region where tensions over mining practices are running high. Workers and activists have also kicked off a general strike in the northern region of Cajamarca, calling on the government to halt the launch of a new open-pit gold and copper mine.

Protesters also argue that the EUR3.8 billion Conga mine - owned by US mining firm Newmont - would forever compromise their water supplies. Disagreements over the Conga mine project in late 2011 triggered the resignation of Humala’s entire first cabinet only four months after it was sworn in.

An open-pit problem

Tensions in Peru surrounding mining concessions and their environmental impact are unlikely to vanish. The country is the world’s second biggest copper producer and 60% of its export earnings come from mining. And while the Peruvian economy grew at a healthy 7.5 percent rate during most of 2011, chronic malnutrition and lack of access to social services continue to blight certain sections of the population, especially those living in rural areas like Espinar.

“The government knows that mining projects are critical to the economy,” said Cecile Lavrard-Meyer, a lecturer at the Institute for Advanced Studies of Latin America at Paris 3 University. “Its major challenge is to prove that in spurring economic growth, and therefore mining investments, it can fulfill the social programmes Humala promised when he won the election.”

Companies like Xstrata and Newmonth argue they are not only creating jobs for Peruvians and revenue for the country, but playing by the rules imposed on them. “Our operations comply with all the requirements set forth by the law. This has been demonstrated through the various monitoring processes conducted by competent agencies,” Xstrata said in a statement following the violent incidents in Espinar.

However, according to international environmentalist group Friends of the Earth, Xstrata has a history of disregarding safety and environmental laws. In an October 2010 report, the ecology group listed numerous controversial projects that Xstrata supported, including the Las Bambas copper mine in southern Peru. In 2008, the Swiss company was forced to pay heavy fines for breaking environmental regulations, Friends of the Earth reported.

Moreover, Peruvian activists think environmental monitoring methods are unreliable and outmoded. “In areas like Espinar the government is not present and has no real capacity to regulate mining practices,” said José de Echave, a former deputy environmental minister, who quit Humala’s government in November 2011 over the Conga mine conflict. “Peru’s legal framework for environmental protection is very weak, and a culture where companies self-regulate reigns.”

A new vision

De Echave is part of a growing - and increasingly outspoken - list of former supporters who have lost faith in Humala. “The president had a very clear position as a candidate, and the issue of mining was very present in his campaign. He said that the right to water came before anything else, and that mining practices would not continue as before,” de Echave explained.

The environment activist said there was widespread discontent among the people who believed Humala would fight for political change, and voted him into power: “Humala is now leading the government of great continuation. He has maintained the status quo on the economy and the environment.”

Congressman Ruben Coa, a representative of the Cuzco region for Humala’s own party, has become a voice of opposition in the wake of the Espinar crisis.

Coa called the decision to incarcerate mayor Mollohuanca an exaggeration by the judiciary and a misstep by the president on Saturday. “They jail him and now there won't be anyone to negotiate with as the mayor is the authority in the region,” Coa told the press.

De Echave says that while Humala has lost some supporters he has steadily forged ties with the powerful mining companies.

In recent days, Humala has insisted he would keep approved mining projects on track, and ordered police to “avoid being provoked” by protesters.

That executive order seemed to completely ignore grievances of Peruvian farmers. Rather than herald the start of peaceful negotiations, Humala’s message probably guarantees more fierce battles to come.